Implications of the U.S. Farm Act on Canadian Agriculture

This paper addresses the implications of the U.S. Farm Security and Rural Investment Act of 2002 or "Farm Act" for Canadian agriculture. The Farm Act, which is expected to add at least US $45 billion in new price supports over its six-year timeframe, is expected to harm the position of less-subsidized and non-subsidized producers in Canada and other countries. Canadian farm products will be less competitive not only domestically, but also in the U.S. and in third-country markets. Canada will be most affected by subsidies for corn, soybeans, wheat, and pulse crops. New country-of-origin labeling rules under the Farm Act are also expected to be disruptive to Canadian livestock exports. In addressing these issues the paper also explores potential Canadian responses - including filing WTO or NAFTA complaints - as well as the broader implications for U.S.-Canada trade and international cooperation